KFH–Bahrain launches Islamic Securitisation programme

TDT | Manama

KFH–Bahrain announced yesterday the launch of a first-of-its-kind Shari’a compliant Securitisation Programme offering financial institutions and state-owned entities an innovative solution to manage both their liquidity positions and balance sheets through the issuance of a Series of Mudaraba Sukuk under a trust structure.

Under the Programme, a Series of Mudaraba Sukuk will be issued against a select pool of financing portfolio where the sukuk holders become the ultimate beneficiaries of the financing portfolio. “This will allow institutions the flexibility to expand or contract their balance sheet, increased capacity to grow business by booking new financing deals, and improve key ratios as and when required,” the statement said.

The programme, KFH said, has been designed in a way that can also be used for non-KFHBahrain financing portfolios, where the Bank acts as an arranger. “This provides a platform for any financial institution regulated by the CBB or any government-owned entity to securitise their assets through the issuance of various Series.”

Commenting, Abdulhakeem Alkhayyat, Managing Director and CEO said: “Through the issuance of asset-back securities, such as mortgage-backed securities, it will increase market activity and financial institutions’ ability to finance housing units in the Kingdom of Bahrain.”

Rashid Alkhan, Head of Wealth Management, also commented: “It provides an opportunity for clients to diversify their portfolio allocation strategy and enhance their risk-adjusted returns by having exposure to a combination of assets